AUDIT COMMITTEE
Minutes of an Extraordinary meeting held on 31st January, 2018.
Present: Councillor M.R. Wilson (Chairman); Councillor L.O. Rowlands (Vice-Chairman); Councillors G.D.D. Carroll, Mrs. P. Drake, V.P. Driscoll, S.J. Griffiths, Dr. I.J. Johnson and Mr. P. Lewis (Lay Member).
Also present: Messrs. I. Phillips and S. Veale (Wales Audit Office).
654 MINUTES –
RESOLVED – T H A T the minutes of the meeting held on 28th November, 2017 be approved as a correct record.
655 DECLARATIONS OF INTEREST –
No declarations were received.
656 CORPORATE RISK REGISTER QUARTER 2 UPDATE (MD) –
The matter had been previously deferred by the Committee to allow a briefing of Audit Committee Members to clarify the Council’s approach to Corporate Risk Management. This briefing was subsequently held on 23rd January, 2018 with Members of the Audit Committee and political Group Leaders being invited to attend. The purpose of the briefing was to provide further explanation with a view to further developing Members’ understanding of the way the Council identified Corporate Risks, the documentation of risks and how they were reported via the Council’s Corporate Risk Register. The briefing also provided an opportunity for Members to ask questions or further discuss any queries that they should have.
The Committee was apprised by the Head of Performance and Development of the Council’s revised approach to risk management which was based on three key elements:
- Risk overview – risks for identification and definition;
- Risk evaluation – assessment of risk position / score;
- Risk management plan – action to manage the risk.
He also referred to the three elements which were reflected within the sections of the new Risk Register Template, details of these sections were set out in paragraphs 10 to 14 of the report.
In terms of the new reporting format, this had been designed to reflect to needs of various audiences. It also enabled employees to identify the risk trends / issues and to better understand the interrelationship between Corporate Risks and associated risk categories.
In addition to the above, the quarterly Risk Summary Report would also contain the following three elements:
- Corporate Risk Summary – provided an overview of all Corporate Risks in terms of their inherent, effectiveness of control and residual scores and provided an outline of the direction of travel (both current and forecast)
- Overall Heat Map – used a risk matrix quadrant to plot the residual risk scores in terms of likelihood and impact for each Corporate Risk in order to illustrate the groups / interrelationship between risks on a heat map
- Thematic Risk Heat Map – used a similar risk matrix quadrant to plot residual risk scores for each Corporate Risk, but by risk category. This provided a more holistic illustration of the distribution of risks by risk category across the matrix and enabled trends and synergies between risks to be identified, with mitigating actions and controls which could be put in place corporately to manage multiple risks.
His attention then turned to the current Quarter 2 update, which covered the period April to September 2017, details of which were set out in Appendix A to the report. He further indicated that there were currently 14 Corporate Risks on the Register and that no risks had been removed from the Register during Quarter 2. Separately, of the 14 Corporate Risks, in terms of their status, one risk was scored high, ten risks were scored medium, two risks scored medium / low and one risk was allocated as low risk status.
In terms of the exceptions, he outlined matters relating to the following subject areas:
- Deprivation of Liberty Safeguards (DoLS);
- Local Development Plan;
- Safeguarding and Contract Management.
The Corporate Risk Summary Report included heat maps that plotted on a matrix the residual risk scores for each Corporate Risk. For Quarter 2 the overall heat map showed that the majority of Corporate Risks congregated around medium. However, the risks were evaluated by their risk categories. There were generally more risk groups within medium to medium high (for reputational based risks). Only one risk, DoLS, sat in the high category.
In regard to the Risk Management Plan Summary, during Quarter 2 significant progress had been made in relation to the above Plan across all aspects of the Risk Register. The vast majority of mitigating actions outlined in the above Plan had a green status and were on track with 14 actions fully completed by the end of the quarter. Where actions had been deemed completed, these would now be removed from the Plan and incorporated as controls within the relevant risks. There had also been slippage in relation to 18 mitigating actions associated with the Legislative Change, Housing Improvement Programme, Waste Management, Information Security, Environmental Sustainability and the Safeguarding Risks and these actions were therefore deemed as actions for Corporate Risk and specific details of these were set out in paragraphs 29 to 46 of the report.
The Council’s internal Insight Board had considered the Quarter 2 report and had reviewed all the Corporate Risks, the heat maps and their interrelationship between the risk categories on 6th September, 2017 and the following issues had been highlighted:
- Local Development Plan risk had significantly reduced since its adoption. Since the Local Development Plan was no longer subject to the judicial review period (six weeks post-adoption), the Insight Board felt that this risk should be removed from the Register, but could be reintroduced at a later date should the need arise
- Contract Management risk was currently scored at medium / low. However, the Insight Board commented that significant progress had been made over the last few months to mitigate this risk through the roll out of the Contract Management briefing sessions for all team managers alongside a series of other mitigating controls. As a consequence, the Insight Board recommended that this risk also be removed from the Register.
The Head of Performance and Development indicated to the Committee that following the Insight Board’s review, it had determined that both the Local Development Plan risk be removed from the Register and also Contract Management, subject to the completion of any related outstanding actions.
His attention then turned to Emerging Risks for the Council and alluded to the Welsh Community Care Information System (WCCIS) and separately to Corporate Building Compliance, details of which were set out in the report at paragraphs 50 to 58, and indicated that both would now be included on the Council’s Risk Register. Subject to the agreement of the Audit Committee to do so, the risk template would be completed for both risks and included in the Quarter 3 update report.
Discussion ensued with a number of questions being asked by Members in regard to the likely timeline of the completion of outstanding actions in relation to Contract Management given the intended removal of the risk from the Council’s Risk Register. The same Member also referred to the Corporate Risk Overview Report and the risk relating to unauthorised DoLS being “Red” and expressed his surprise, given the related Supreme Court judgement made in 2014. In responding to the Member’s comments, the Head of Performance and Development explained that the DoLS risk related to pressure on existing resources as a result of increased demand for related assessments and referred to paragraph 20 of the report which set out the specific implications for the Council. Separately, the Operational Manager for Audit also indicated that a further internal audit follow up review had been included in the Internal Audit Risk Base Audit Plan for 2017/18.
In referring to the same Corporate Risk Overview Report for Quarter 2, the Lay Member enquired why the Corporate Risk in relation to Integrated Health and Social Care only had a residual risk score of 4. In response, the Head of Performance and Development indicated that this action related to the integration of services between the Council and the Health Board. There were actions and measures within the Risk Register to address the matter.
The Chairman, in referring to the Member Briefing that had taken place the previous week, expressed his thanks on behalf of the Committee to those officers who had been involved in preparing information for the exercise.
Having regard to the above, it was
RESOLVED –
(1) T H A T the new reporting format for the Council Risk Register and its associated reporting arrangements be endorsed.
(2) T H A T the current position of Corporate Risks and the Emerging Risk themes be noted and the associated recommendations made by the Council’s Insight Board and Corporate Management Team as set out in the report be endorsed.
(3) T H A T the report be referred to the Cabinet for consideration and endorsement.
Reasons for decisions
(1) In acknowledgement of all the Corporate Risks for the Council and that these were effectively monitored, addressed, reviewed and updated on a regular basis.
(2) To endorse the removal of the Local Development Plan and Contract Management, (subject to the completion of any outstanding actions) from the Risk Register and the inclusion of Emerging Risks in relation to Welsh Community Care Information System and Corporate Building Compliance.
(3) To allow the Cabinet to consider the matter.
657 WAO PERFORMANCE WORK PROGRAMME UPDATE 2017/18 (MD) –
Details of the WAO Performance Audit Programme for 2017/18, which included an update on progress in delivering the various projects, were set out in Appendix A to the report. In referring to the report, Mr. Veale and Mr. Phillips provided an overview of progress for each of the projects contained within their work programme.
In referring to project item 4 and 5, a Member enquired as to when both projects would be undertaken. In response, Mr. Phillips indicated that the commencement was imminent and likely to be during March 2018.
Another Member referred to project item number 2 and enquired of progress in respect of the pilot. In response, Mr. Phillips indicated that data was currently being collated to identify notable practices, with the project itself being exploratory given the infancy of the project. The Head of Performance and Development also commented that the intention was to undertake a survey of staff, elected Members including focus groups, to assist the understanding of the work force and Members on the Act’s provisions.
In addition to the above, a Member sought clarification and information regarding the project in respect of Strategic Commissioning. Separately, the Chairman also sought clarification regarding the proposed project in relation to the provision of Services to Rural Communities and Using Data Effectively. In responding to both Members’ queries, the WAO representatives alluded to the project briefs and gave an assurance that they would provide a more detailed response to Members of the Committee following the meeting to clarify the position of each of the studies.
Having regard to the above, it was
RESOLVED – T H A T the progress to date in respect of the WAO Performance Work Programme for 2017/18 be noted.
Reason for decision
In order to review and monitor progress in respect of the above programmes.
658 CORPORATE COMPLAINTS ANNUAL REPORT 2016/17 AND SIX MONTHLY REVIEW OF COMPLAINTS 1ST APRIL TO 30TH SEPTEMBER 2017 (MD) –
All Corporate Complaints and Compliments were recorded on Oracle CRM and fed into the Complaints and Compliments Dashboards.
Corporate Management Team had received reports on the annual performance of Corporate Complaints over the last three years. In addition, Social Services report their annual complaints performance to the Healthy Living and Social Care Scrutiny Committee.
During 2016/2017 344 Stage 1 complaints and 49 Stage 2 complaints were received. Therefore a total of 393 complaints. This was an increase of 17 complaints compared to 2015/16.
There were 303 complaints for the Environment and Housing Directorate; 79 complaints for the Resources Directorate and 11 for the Learning and Skills Directorate.
Corporate complaints were being investigated well and analysis showed that 88% of complaints were being resolved at Stage 1. However there was room for improvement.
75% of complaints were dealt with within the 10-20 working day deadline, however 25% were not. The 75% figure was an improvement compared to the previous year of 73%. If Stage 2 complaints only were looked at in terms of response times, 88% of those were dealt with within 20 working days.
The average number of complaints received was 33 per month. August 2016 saw a total of 100 Stage 1 complaints and 6 Stage 2 complaints. The main reason for this was due to 90 complaints for Waste Management due to the change in waste and recycling days across the Vale. 44% of all Corporate Complaints received during 2016/17 related to Waste Management. To put this into context, the Waste Management Team provided up to 180,000 different collections to Households per week.
During 2016/17 there were 41 complaints in respect of this Council reported to the Public Service Ombudsman for Wales. No Section 16 or 21 Reports were issued against the Council during 2016/17.
An Equality Survey of complaints was undertaken in March / April 2016. The main finding was that 68% of people who returned their Equality Form were over 47 years old and 1% (1 person) was between the ages of 17 and 26 years old. More work would be done to highlight the use of the Council's Mobile App to make a complaint.
Compliments had been recorded during 2016/17. Waste Management received 86 compliments, which was 39.9% of the total recorded.
The Head of Performance and Development referred to areas for future work in 2017/18 which included Managers using the Complaints Dashboard to monitor their own performance in respect of Corporate Complaints and to report to Directorate Management Teams on a regular basis. Managers needed to improve the percentage of complaints completed within the target completion times, and consider key learning points and causes of complaints to improve service delivery. The Customer Complaints Officer would liaise with managers to identify any training needs. She would also report to Corporate Management Team on a regular basis.
A Member, in referring to the contents of the report, enquired whether it would be better if the reporting itself identified trends by utilising more than one year’s worth of figures, including the utilisation of suitable graphs.
Separately, the Chairman referred to the Council’s C1V mobile telephone “APP” and referred to the “reported item” element of the menu and suggested that this needed to be reviewed as certain aspects of the menu required reordering i.e. compliments, complaints, etc. In regard to the report itself, he suggested that it would be useful for Members of the Committee to be able to gauge the origin of complaints i.e. whether these were letter, e-mail or other, and he was concerned with the results of the Equality Survey which appeared to indicate that younger members of the community may not be accessing Council facilities. He also enquired of officers if a refresh of the current C1V “APP” was anticipated. In response, the Operational Manager for Customer Services indicated that they had recently received a presentation of a potential reformat of the current APP as part of the Council’s Digital Strategy / Digital Customer and the related information was currently being reviewed.
General discussion ensued regarding the wider public awareness of the Council’s mobile telephone APP with it being acknowledged by officers that further work was required and had indeed been identified as part of the Council’s Digital Strategy / Digital Customer which had identified and prioritised the issue.
Having regard to the above, it was
RESOLVED –
(1) T H A T the Corporate Complaints Annual Report for 2016/17 and the six monthly review of complaints 1st April to 30th September, 2017 be noted.
(2) T H A T future reports to the Committee contain trend analysis of complaints including the use of appropriate graphs.
Reasons for decisions
(1) In acknowledgement of the Committee’s responsibility to monitor the subject areas.
(2) To provide appropriate information to allow performance issues to be identified.
659 WHISTLEBLOWING POLICY – PERFORMANCE UPDATE (MO) –
The Council adopted the Whistleblowing Policy in March 2014.
The purpose of the Policy was to ensure that employees of the Council, (excluding those employed at a school by a School Governing Body), including temporary employees, trainees, independent contractors as well as those engaged through an external agency, were aware of their responsibility to the public and to protect individuals who may need to disclose information concerning any “malpractice” within the Council.
The Policy confirmed the standards expected from employees and set out a framework within which they could make a "protected disclosure" without fear that they would be subjected to victimisation or dismissal as long as the disclosure was made in the public interest in accordance with the Public Interest Disclosure Act 1998 (“the Act”).
The Act identified a "protected disclosure" could be made where an employee had a reasonable belief that in making the disclosure they could show one or more illegal practice, a failure to comply with legal obligation, the health and safety of an individual (member of public or staff) being endangered, damage to the environment, a miscarriage of justice and / or the deliberate concealment of any of these.
The Audit Committee, acting through the Monitoring Officer, had within its Terms of Reference the overall responsibility for the maintenance and operation of the Whistleblowing Policy.
The Operational Manager Customer Relations was responsible for the registration and maintenance of a central register of all Whistleblowing concerns and to monitor progress and outcomes of each investigation. Directors were responsible for the receipt and ensuring the proper recording of concerns on the Whistleblowing Central Register and for the effective operation of the policy within their own Directorate. This included ensuring that each employee was aware of the policy and how to use it, managers were effectively trained in the use of the policy and whistleblowing concerns were appropriately recorded and managed.
Annual promotional activity to make employees aware of the Policy had been undertaken in December, 2017 under the promotional heading of "Whistleblowing - Your Responsibility".
During the period under review in the report, three concerns were raised in 2016/17 and two in 2017/18 up until 31st December, 2017. In respect of the total number of concerns raised, two related to the Social Services Directorate, two to the Resources Directorate and one to the Environment and Housing Directorate. No concerns were raised relating to the Learning and Skills Directorate. Following investigations, none of the concerns raised were upheld.
Of the five concerns reported, two related to concerns of illegal practices (fraud), two to potential breaches of health and safety and one to a concern about the failure to comply with legal obligations.
Referring to concerns raised in respect of alleged health and safety breaches, the Chairman queried the Council’s processes relating to health and safety training of its employees. Further, he alluded to Elected Members’ obligations in relation to adhering to Council’s policies in respect of health and safety and corporate safeguarding. In responding to these points, the Monitoring Officer referred to various measures the Council had at its disposal regarding Managers’ training, the Council’s induction programme for new employees and staff awareness campaigns. In response the Chairman queried if an employee survey had been carried out recently to assess employees’ knowledge of their legal obligations relating to health and safety. He also suggested that specific briefings on the Council’s policy in regard to health and safety be provided to Elected Members as part of the Council’s Member Induction Programme. In response, the Monitoring Officer acknowledged the points raised relating to an employee survey and would consider these matters further. She also indicated that the issue of Member awareness of Council policies regarding health and safety and related induction sessions would be raised with the relevant officers for further consideration. She would send a formal response to the points raised by the Chairman in relation to health and safety matters post meeting by circulating an e-mail to the Committee Members.
Discussion ensued with the Monitoring Officer providing clarification in regard to the option of anonymity of complainants who made complaints under the policy and the related legislative and evidential position.
Further discussion also touched upon the number of complaints made under the Policy and whether this could be taken as an indicator of the governance / ethical health of the Council. In commenting on the matter, Mr. Veale intimated that caution should be exercised when attempting to draw comparisons between the Council and other Local Authorities in Wales.
RESOLVED –
(1) T H A T the actions taken by the Council to support the Whistleblowing Policy and the summary of Whistleblowing incidents recorded for 2016/17 and 2017/18 up to 31st December, 2017, be noted.
(2) T H A T the Monitoring Officer be requested to provide clarification on those matters raised by the Chairman in regard to the Council’s health and safety arrangements and this be circulated to Members post meeting.
Reasons for decisions
(1) In acknowledgement of the Committee’s overall responsibility for the maintenance and operation of the Council’s Whistleblowing Policy.
(2) To provide clarification in regard to health and safety matters.
660 PROPOSAL TO AMEND THE MINIMUM REVENUE PROVISION 2018/19 POLICY (HOF) –
The Council was required by statute to set aside a Minimum Revenue Provision (MRP) to repay debt.
MRP was the method that Local Authorities used to charge their revenue accounts over time with the cost of their capital expenditure that was originally funded by debt. Before 2007/08, the method of calculating MRP was specified in legislation; from 2007/08 onwards Local Authorities had been free to set their own policy on calculating MRP with the sole legislative proviso being that the amount calculated should be one that the Council considers to be “prudent”.
Welsh Government (WG) had issued guidance on what constituted prudent provision and this required the Council to approve an annual statement of its policy on calculating MRP.
The Council had capital expenditure funded by debt which could be categorised into three distinct groups:
- Housing Revenue Account (HRA) Capital Financing Requirement (CFR);
- General Fund Unsupported Capital Financing Requirement / Prudential Borrowing;
- General Fund Supported Capital Financing Requirement.
These did not equate to external borrowing for the Council as a significant portion of the current Capital Financing Requirement was funded from Internal Borrowing.
MRP for HRA CFR borrowing was currently calculated using a 2% reducing balance method for existing balances which was regulated. From 1st April, 2021 any new debt would need to be accounted for based on either the asset life or depreciation methodology.
In respect of General Fund Unsupported CFR, the 2017/18 MRP Policy previously considered by the Committee on 20th February, 2017 and Full Council on 1st March, 2017, recommended that MRP for all unsupported / prudential borrowing be linked to the expected asset life of the scheme for which the capital expenditure was incurred. Reference was made to MRP repayments relating to the funding requirement for 21st Century Schools as an example, which was calculated by equal instalments over the expected asset life, which in this case was 65 years.
The MRP in respect of General Fund Support Borrowing was capital expenditure funded by debt and was currently accounted for by charging a contribution at 4% of the reducing balance that was outstanding at the beginning of each financial year. This approach was only permitted for supported borrowing as it was provision by WG through the Revenue Support Grant (RSG) system. Historically the Council would have received an element of grant linked to the 4% reducing balance method and this resulted in the current approach being used to calculate MRP on the supported element of the CFR.
At a time of increasing pressure on the revenue budget, a number of Local Authorities across the UK had reviewed their MRP Policies to ensure there was a balance of prudent provision and not overprovision. This could help to realise savings in the revenue budget. In Wales reviews had already been carried out by Torfaen, Merthyr Tydfil, Conwy, Denbighshire, Flintshire, Rhondda Cynon Taff, Caerphilly, Newport and Monmouthshire Councils. These Councils had either implemented or had proposals to implement their revised MRP policies.
The Council commissioned Arlingclose, the Council’s independent advisors, to carry out a review of the MRP policy in December 2016 and subsequently highlighted alternative approaches that the Council could adopt linking the supported CFR with the average remaining asset lives of its assets, the capital expenditure for which could be linked to the Supported Borrowing CFR. This approach was included as a method that WG outlined as prudent in WG guidance.
The Council was legally obliged to have regard to the guidance which was intended to enable a more flexible approach to assessing the amount of annual provision than was required under the previous statutory requirements. The guidance offered four main options under which MRP could be made, with an overriding recommendation that the Council make prudent provision to redeem its debt liability over a period which was reasonable and commensurate with that over which the capital expenditure was estimated to provide.
Taking into account the guidance that the Council was required to adhere to, Arlingclose recommended three broad options for the Council for calculating MRP and the following were considered by the Committee:
Capital Financing Method at a 4% reducing balance – This was the approach currently adopted by the Council. Based on this approach the current charge for 2017/18 would be £4.314m and the projected charge for 2018/19 would be £4.275m. It was important to note that when using the reducing balance approach, whilst the vast proportion of repayment would take place over the first 25 years, a loan of £2m would take 147 years to clear to less than £5,000 and significantly longer to clear completely. At the end of the 40 year asset life 20% of the balance would still be outstanding.
The Straight Line Asset Life Method was the MRP charge on the supported borrowing CFR that would be applied in equal instalments across the 40 year period that Council Tax Payers would expect to see some benefit from the asset. The 2018/19 MRP charge using this approach would be £2.672m as outlined in Appendix 1 enabling a saving of up to £1.603m to be realised on a continuing basis.
The Annuity Asset Life Method was the cheapest MRP option and took into account the time value of money whereby paying £100 in 10 years’ time was less of a burden that paying £100 now. The schedule of charges produced by the annuity method provided a fairer charge than equal instalments as it took into account the real value of the amounts when they fell due. However, as this approach resulted in a lower charge in earlier years and a higher charge in later years, this was problematic from a budgetary point of view as additional budget would need to be identified in later years. The 2018/19 MRP charge using this approach would be £1.424m as outlined in Appendix 1 enabling a saving of up to £2.851m to be realised in 2018/19. An additional budget would need to be identified to fund increased MRP repayments over the life of the asset.
MRP was intrinsically linked to the concept of the CFR in the Prudential Code. The CFR represented the total of all the Council’s past capital expenditure, less the total capital financing applied other than debt. Debt was only a temporary form of finance as loans must be repaid. The CFR therefore represented the Council’s underlying need to borrow for capital purposes, and the amount that had yet to be permanently financed. MRP was the main method of permanently financing that expenditure.
The supported CFR at 31st March, 2017 was £106,886,629, using the current reducing balance approach only 80% of the debt would be repaid at 31st March, 2058 as illustrated in Appendix 1. Under the Asset Life approaches shown at Options 2 and 3, the outstanding CFR would be fully repaid at 31st March, 2058 which was when the projected useful economic lives of the Council’ s building assets would have expired. The annuity repayment had been illustrated using an interest rate of 2.98% which was the average 40 year annuity Public Work Loans Board rate (with certainty rate discount applied) at 30th September for the past five years.
A number of queries were raised by Members regarding the Council’s preferred option, in particular, clarification was sought regarding the Council’s rationale for not taking a stance where it paid down its debt liabilities by making voluntary contributions when interest rates were low. In response, the Principal Accountant indicated that this was dependent upon the type of loan and referred to the Council’s Housing Stock Buy-out as an example. It was not always possible to take advantage of low interest rates as in the case of the above buy-out, where the interest rate was set by the Treasury to ensure it was not out of pocket. In addition, advice from the Council’s independent advisors was that given the Council’s levels of reserves and MRP, it was advantageous to borrow internally.
In response to a question, the Principal Accountant indicated that implications of Brexit, where possible, had been included in the proposals. However, as this was an internal accounting process, Brexit implications were unlikely to have an impact on the same and concerns, if any, mainly surrounded budgeting and asset life.
A Member indicated that whilst he was supportive of the Council’s preferred option (Option 2), this appeared to be contrary to the spirit of the Well-being of Future Generations Act. In addition, discussion also touched upon the differences in the type of debt associated with the funding of the Council’s CFR, Capital Programme, etc. with an explanation provided by the Principal Accountant.
A number of Members queried the origin of the 4% Capital Finance method of reducing balance approach. The Principal Accountant and Mr. Veale reiterated that this was linked to the RSG system and the element of grant linked to the reducing balance method.
Mr. Veale also indicated that the WAO had been consulted on the proposals, but the final decision rested with the Council having acknowledged the independent advice received. He further indicated that the implications of the Well-being of Future Generations Act had also been considered and, in terms of what the Council was proposing, it was in keeping with other Local Authorities in Wales.
Having regard to the above, it was
RESOLVED – T H A T the proposed amendment to the Minimum Revenue Provision Policy for 2018/19 for supported borrowing be approved.
Reason for decision
To approve the above proposals which amended the Council’s Minimum Revenue Provision Policy prior to its approval by Full Council in accordance with statutory deadlines.
661 AUDIT REPORT – ETHICS 2017/18 (OMA / HOA) –
The above review had been undertaken as part of the Internal Audit’s 2017/18 Risk Based Plan on behalf of the Internal Audit Shared Service (IASS) with the review itself being undertaken on behalf of the Council by the South West Audit Partnership (SWAP).
The purpose of the review was to provide assurance that the Council was operating under high standards of ethical behaviour, whilst also assessing the cultural climate in place at the Council.
Attached at Appendix A to the report was a copy of the report with the overall conclusion being that the Council had performed extensive work to redefine its ethical climate and culture with the input and assistance of staff and as a consequence, the Council should be commended for its forward thinking approach to ethics and culture. The creation of the Council's Staff Charter had been the starting point for this, which had been used as a vehicle for further processes to be created and introduced to the Council's environment.
The Auditor concluded that the areas reviewed were found to be adequately controlled. Internal controls were in place and operating effectively and risks against the achievement of objectives were well managed. Therefore, an overall substantial assurance opinion had been provided.
In addition, no formal recommendations had been made within the report and it was extremely pleasing to report that following a benchmarking exercise with SWAP's Partners, the Council had a greater level of maturity with regards to its ethics and culture than each of the SWAP Partners involved in the benchmarking. The Auditor concluded that the Council had shown that it had successfully engrained its vision and values into the work environment, therefore the Council's approach to ethics and culture and the benefits it could have towards empowering staff during times of organisational change should be praised.
A number of Members expressed their pleasure with the review findings, particularly given that the Council held itself to such a high standard which had been borne out by the review findings.
RESOLVED – T H A T the audit report in respect of Ethics 2017/18 and the positive outcome be noted.
Reason for decision
In acknowledgement of the Committee’s responsibility for monitoring the Council’s Internal Audit Shared Service (IASS) and to ensure it remained compliant with the Public Sector Internal Audit Standards.
662 PROGRESS AGAINST THE AUDIT RISK BASED PLAN 2017-18 (OMA / HOA) –
At the previous meeting of the Committee in November 2017, it had been agreed that following the presentation of the Head of Audit’s summary outturn report covering the previous period April to October 2017 and as a consequence of the impact of the number of staff vacancies the section was currently experiencing, the Committee would be updated on the progress against the above Plan.
Appendix A contained information relating to the Directorates, the audit areas, together with a position statement relevant to that area. In addition, the appendix highlighted what action was being undertaken in relation to specific areas e.g. work allocated for Quarter 4 and / or deferred to 2018/19. The Operational Manager Audit, in referring to the report, gave an assurance that every effort was being made to ensure that as much of the 2017/18 Risk Based Audit Plan could be completed in order that she was in a position to provide the Annual Opinion.
The appendix to the report indicated that nine reviews would be deferred to the financial year 2018/19. Work within the Plan had also been identified to be undertaken by the South West Audit Partnership on behalf of the Internal Audit Shared Services (IASS) and these areas were set out within that appendix which would encompass a new approach based on the “three lines of Defence Model” promoted by the Chartered Institute of Internal Auditors and these were set out in paragraph 6 of the report.
She also indicated that consultation had also been undertaken with the Managing Director and the Head of Finance (Section 151 Officer) following which it had been agreed that four areas would be included in the Healthy Organisation Review, these being Risk Management, Procurement and Commissioning, Programme and Project Management and Information Management. She alluded to the rationale for this approach which related to the following:
- The results of the review could be used to inform the Audit Plan for the following year;
- Members, officers and Internal Auditors were more informed on the organisation's assurance arrangements;
- Addresses systemic organisation failure through a corporate view, rather than individual control failure;
- Promoted the efficient use of assurance resources – assurance was expensive and duplication was identified through this approach; and
- Could eliminate assurance reporting in silos – supported a move towards integrated, organisational wide reporting.
A Member queried the reasons for deferrals in particular, the reason for Catering and Deprivation of Liberty Safeguards (DoLS). In response, the Operational Manager for Audit advised that the Catering review had been delayed as a consequence of the implementation of the commercial enterprise. In regard to DoLS, this had been subject to a previous audit in 2016/17 and as indicated in an earlier report in the agenda considered by the Committee, had been included in the Council’s Risk Register. A follow-up review would be undertaken during Quarter 4 of the Plan.
Discussion ensued with a number of comments being raised by Members regarding the ongoing position in regard to the IASS restructuring exercise. In response, the Head of Finance alluded to current discussions which were ongoing with relevant Local Authority Section 151 Officers with a view to extending the existing shared service. These discussions were ongoing and in the interim period SWAP would be undertaking a programme of work on behalf of the IASS to the end of the current financial year.
Having regard to the above, it was
RESOLVED – T H A T the position statement on the audit work including proposed changes as set out in the 2017/18 Internal Audit Annual Risk Based Plan be approved.
Reason for decision
In order for the work contained in the above Plan to be carried out.